Ethereum’s price has been doing okay, but a closer look reveals a problem: network activity is surprisingly low. Even recent upgrades haven’t boosted things as much as hoped.
Weak On-Chain Engagement
Data from Glassnode paints a concerning picture. While Ethereum’s price has shown some strength, the number of users interacting with the network is down. This is worrying, especially considering recent upgrades aimed at improving performance and attracting users.
The recent Pectra upgrade (launched in early May, combining the Prague and Electra updates) hasn’t led to a surge in activity. Glassnode’s data shows that:
- New users are down:
The average number of new Ethereum addresses is slightly lower than earlier this year. - Returning users are down: Fewer old addresses are becoming active again.
- Overall user engagement is down: The number of active users is decreasing.
Glassnode isn’t sure if this is due to the upgrades themselves or broader market trends.
A Price Rally Despite Weak Activity
Despite the low network activity, Ethereum’s price has been climbing. Analyst ShayanMarkets predicts a significant price increase, but with a short-term correction first. He points to a recent surge in trading volume as a sign of an “overheated” market, suggesting a temporary price drop before another rally. This drop would allow for more buying before the next price increase. Essentially, the current price rise might be driven by new buyers rather than increased network activity.
